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The Coop Bank drops its fixed one year first-home buyer special by -10 bps to 1.99%. It has cut other short rates, but raised most longer fixed rates

The Coop Bank drops its fixed one year first-home buyer special by -10 bps to 1.99%. It has cut other short rates, but raised most longer fixed rates

The Co-operative Bank has a 'special' rate for first home buyers, one it had launched at 2.09%, fixed for one year.

Now it has cut that rate by -10 bps to just 1.99%.

It is 'special' because of its conditions. These are that it must be 'new lending' to the bank above $200,000, and the lending must be used by the applicants to purchase an Owner Occupied first home (as determined by the bank). A minimum 20% equity is required. But this offer is also available for Kainga Ora First Home Loans.

Only Heartland Bank's fixed one year rate is lower.

Coop Bank have also cut their six month fixed rate to just 2.19%, down by -6 bps, and their eighteen month rate by -6 bps to 2.39%.

Their rates for 3, 4 and 5 years are all increasing, basically to the benchmark levels the main banks have moved to recently.

The Coop Bank rate changes are effective, Thursday, June 17, 2021.

The lowest rate for any fixed term at any bank is still Heartland Bank's 1.85%. And the highest rate for any fixed term is ANZ's new five-year rate of 4.39%. That is the widest/steepest since 2012.

One useful way to make sense of these changed home loan rates is to use our full-function mortgage calculators. (Term deposit rates can be assessed using this calculator).

And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options.

Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.

Fixed, below 80% LVR 6 mths   1 yr   18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
as at June 15, 2021 % % % % % % %
               
ANZ 3.39 2.19 2.35 2.59 2.99 3.99 4.39
ASB 2.99 2.19 2.49 2.59 2.99 3.39 3.69
2.99 2.19 2.35 2.55 2.99 3.39 3.69
Kiwibank 3.55 2.19   2.55 2.99 3.39 3.69
Westpac 2.99 2.25 2.45 2.59 2.99 3.39 3.69
               
Bank of China  3.45 2.15 2.15 2.55 2.75 3.05 3.35
China Construction Bank 4.70 2.65 2.65 2.65 2.80 2.89 2.99
Co-operative Bank (*FHB only) 2.19 1.99* 2.39 2.59 2.99 3.39 3.69
Heartland Bank   1.85   2.35 2.45    
HSBC 2.79 2.19 2.19 2.45 2.69 2.99 3.19
ICBC  2.89 2.25 2.35 2.35 2.65 2.89 2.99
 SBS Bank 3.39 2.19 2.39 2.49 2.79 3.09 3.39
 [incl Price Match Promise]  2.89 2.19 2.35 2.55 2.99 3.39 3.69

Fixed mortgage rates

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9 Comments

Only high quality borrowers are eligible. The return of the money must be more important than the return on it.

The RBNZ must be exasperated:
Friedman pointed out the basic, non-trivial distinction between a liquidity effect and an income effect. Low rates can be stimulative in the short run (the liquidity effect), but over the long run their persistence means something far different. A yield curve is supposed to be upward sloping given the core time value of money and investing. That arises from opportunity cost, meaning the more plentiful the opportunities the greater the time value and the steeper the curve (the income effect). Yield and/or money curves (the eurodollar curve and even the history of the OIS curve) that collapse and remain that way unambiguously demonstrate that "stimulus" deserves only the quotation marks.

You get the behavior you incentivise.

The mad bank scramble to lock them in now and it's again to change borrowers after 12 months.

If DTi's get deployed, all the banks will be fighting over high equity borrows, and trying to offload highly leverage ones. Popcorn.

Very much doubt it. If DTI is deployed, it is a new lending limit. Just like the LVR restrictions. Back book is irrelevant. If anything, it makes those loans stickier, since, if banks are restricted from high DTI lending, the loan is unlikely to move.

Is Co-op desperate to try and stay relevant? According to RBNZ key metrics, their housing has grown 6% 12m ended Mar 21 at a time that market has grown 11% ... so material underperformance.

Anyone noticed 'Reverse Mortgage' adverts appearing on NZ TV again?

Or, ironically, right here on this website.

This must be the last ditch effort to pump the market and refill the punch bowl, I thought I had already seen it but the party continues. The problem gets pushed out for yet another year. The next election could be fun, cannot see the party lasting till after that.